1. MTBPS
WE ARE TRAPPED

2. Macroeconomic aspects
The trapped second economy
Growth
Fiscal policy
Tax .

3. Macroeconomic aspects – chapter 1
Challenges (acknowledged) :
Unemployment
Poverty;
Rampant specter of HIV Aids;
But…
Our economy has the inevitable panacea to satisfy the thirst of the first economy;
The first economy has the financial wherewithal, articulate/vocal, educated etc,
The second economy is weak, no negotiation muscle and therefore excluded from active economic agent – amputated confidence,
Applied every trick on economics books but the problem of the widening gap between the first and the second economy remains.

4. Macroeconomic aspects – chapter 1
Facilitating economic activity within the second economy;
Skills acquisition….better work opportunities and improved livelihood – links between first and second economy,
But..
Structural deficiencies – low return on education investment! (education a priority in non-interest expenditure),
Low savings rate (difficult to achieve investment of 25% of GDP in 2014). Need to introduce compulsory savings,
Increasing fiscal deficit is no friend of the first economy – it vocal and educated,
Strain on social security – reflection of reality on our economy.

5. Macroeconomic aspects – chapter 1
Personal savings/PDI

6. Macroeconomic aspects – chapter 2
Support from low borrowing cost,
Increase PCE.
Low inflation,
Increase the net worth of salaries and wages, investments etc.
Improving sentiments,
Rating agencies,
Forex reserves,
Elimination of the NOFP,
Strength of the ZAR.
Increase in investment from SOEs,
Buoyant manufacturing sector despite ZAR appreciation,

7. Macroeconomic aspects – chapter2

8. Macroeconomic aspects – chapter 2
Challenges facing the economy
Tepid global recovery (a threat to export destination),
Risks imposed by high crude oil prices (S.A. net importer of crude oil),
Widening current account deficit (as a result of the strength of ZAR),
Attracting sustainable FDI,
Maintaining competitiveness of resources sector,
Sustainable interventions to reduce poverty and unemployment.

9. Macroeconomic aspects – chapter 3
Low debt service cost avail resources for other social imperatives;
Buoyant private spending to boost revenue (at the back of challenged exporting sector);
RAF expenditure deserves a speeding fine!

10. Macroeconomic aspects - chapter 3
Incidence of poverty, unemployment and rampant specter of HIV Aids, a threat to fiscal prudence,
Sale of state assets to be used to retire debt ,
Public sector remuneration needs review (could impact on fiscal ratios)

11. Macroeconomic aspects- chapter 4
SSA revision of GDP figures in November could impose revision on revenue estimates,
Concur with review on motor vehicle allowance…..
Retirement tax should be reduced.
A very good interim budget speech

12. Macroeconomic aspects
Thank You
Mandla Maleka